Moving to Italy is not just a lifestyle choice—it also represents a concrete tax opportunity. The country has introduced several favorable tax regimes for foreigners, designed to attract new residents and skilled professionals.
Whether you are a freelancer, an entrepreneur, or a foreign retiree looking for a place to live well and pay less tax, there are specific options designed for you.
Let’s take a look at the main tax benefits available to foreigners, who they’re aimed at, and how they work in practice.
Inpatriate regime in Italy: benefits for skilled workers and expats
The inpatriate regime in Italy is aimed at foreign citizens (or Italians living abroad) who transfer their tax residence to Italy for work purposes. It is designed to attract skills and investment.
Under this regime, income similar to employment income and income from self-employment related to professional activities carried out in Italy—up to a maximum of €600,000 per year—is included in the total taxable income at only 50% of its value.
Eligible individuals include employees, individuals with income similar to employment income, and self-employed professionals.
Beneficiary requirements:
- They must commit to maintaining tax residence in Italy for at least four years.
- They must not have had tax residence in Italy in the three tax years prior to the transfer.
- They must carry out their work mainly in Italy for most of the tax year.
- They must hold high-level qualifications or specializations, as defined in Legislative Decree no. 108/2012 and Legislative Decree no. 206/2007.
Duration and additional conditions:
- The inpatriate regime takes effect in the fiscal year in which the person transfers their tax residence to Italy and continues for the next four years.
- If the worker fails to maintain tax residence in Italy for at least four years, they will lose the benefits and must repay any benefits received, including accrued interest.
The law offers an additional benefit to workers with minor children, providing that only 40% of their income is included in total taxable income. This applies if the worker moves to Italy with a minor child or in the event of the birth or adoption of a child during the benefit period. In the latter case, the reduced tax rate applies from the year of birth or adoption for the remaining eligible period, provided the child resides in Italy.
Real-life case: Thomas, a German IT consultant, moved to Milan and was able to take advantage of the inpatriate regime. He kept his international clients and only paid tax on 30% of his Italian income, achieving significant tax savings.
Flat tax for new residents: a solution for high net worth individuals
The flat tax for new residents is an option designed for those with high foreign income who want to move to Italy and pay less tax, in a simple and transparent way.
Requirements:
- Transfer of tax residence to Italy. The individual must transfer their tax residence to Italy.
- No prior residency. The person must not have been a tax resident in Italy for at least nine of the ten years prior to the start of the regime.
- Filing the option. The regime must be chosen in the tax return for the year in which the tax residence is transferred to Italy or in the return for the following year.
- Optional advance ruling. Before opting in, a ruling request may be submitted to the Italian Revenue Agency to confirm eligibility, including a checklist and supporting documents.
- Payment of the substitute tax. The taxpayer must pay a lump-sum tax for each tax year the regime is active.
Main benefits:
- Annual flat tax of €100,000 on foreign income. However, Decree Law 113/2024 increased the substitute tax on foreign income to €200,000.
- Extendable to family members for an additional €25,000 per person.
Real-life case: Lina, an Argentine entrepreneur, transferred her tax residence to Tuscany under this regime. With multiple investments abroad, she found the flat tax to be a stable and advantageous fiscal option.
Tax incentives for foreign eetirees: live well, spend less
The regime for foreign retirees applies to those who move to small towns in central and southern Italy, offering tax benefits to retirees relocating to the country.
It applies to those transferring their residence:
- To municipalities with fewer than 20,000 inhabitants in the regions of Sicily, Calabria, Sardinia, Campania, Basilicata, Abruzzo, Molise, and Puglia.
- To municipalities listed in annexes 1, 2, and 2-bis of Decree Law no. 189 of 2016.
Main benefits:
- Flat 7% tax rate on all foreign income
- Duration: 9 years
- Exemption from certain Italian tax filings
Whether it’s the inpatriate regime, the flat tax for new residents, or the incentives for foreign retirees, every profile can find a suitable regime to live better and pay less.
Note: The Sostegni Ter Decree (Decree Law 4/2022) extended access to the favorable regime to include retirees living abroad who move to towns affected by the L’Aquila earthquake of April 6, 2009. Additionally, the previous limit of 20,000 inhabitants—previously applicable only to towns in southern Italy—was extended to all eligible municipalities, including those affected by earthquakes, which were previously subject to a 3,000-inhabitant limit. Thanks to this change, towns like Camerino, Matelica, Tolentino, and Norcia are now included in the regime.
